What does pre 88 GMP mean?

What does pre 88 GMP mean?

Guaranteed Minimum
From 6 April 1988 changes in legislation meant the Guaranteed Minimum Pension elements before and after this date are calculated in different ways. In pensions’ terminology, scheme service from 6 April 1978 to 5 April 1988 is known as Pre-88 GMP, and service from 6 April 1988 until 5 April 1997 is known as Post-88 GMP.

Can you cash in a GMP pension?

As GMP is a promise to pay a certain amount of defined benefit pension from age 60 (women) / 65 (men), it must normally be paid as a pension. No tax free cash can be paid from GMP rights, unless the member is retiring on grounds of serious ill-health.

How does post 88 GMP increases in payment?

GMP built up from 6 April 1988 to 5 April 1997 is increased by the Fund in line with increases in the Consumer Prices Index (CPI), up to a cap of 3%. So, if you are receiving GMP which built up from 6 April 1988 to 5 April 1997 it will be increased by 0.5% in the April 2021 payment due to be paid on 23 April 2021.

What age is GMP paid?

60
GMP payment age is 60 for females and 65 for males, which may differ from the normal retirement age of the scheme or indeed the age at which a member chooses to take their benefit (i.e. early or late). GMP accrues at different rates for males and females.

Can GMP be trivially commuted?

A trivial commutation lump sum can be paid at any time after GMP Age (age 65 – men; age 60 – women) or from age 55 if your pension does not include a Guaranteed Minimum Pension (GMP) entitlement. * The ‘cash equivalent value’ represents the value of your whole pension, in cash terms.

Is GMP paid in addition to state pension?

There is a link between the GMP and the additional State Pension in that, when a person reaches pensionable age, the total amount of GMP is subtracted from the total amount of additional state pension built up between 1978 and 1997, and any net amount is paid.

Does pre 88 GMP increases in payment?

Between 1978 and 1997, contracted-out schemes were required to provide a Guaranteed Minimum Pension (GMP). The draft Guaranteed Minimum Pensions Increase Order 2021 provides for an increase of 0.5% with effect from 6 April 2021, in line with the increase in the Consumer Prices Index over the year to 30 September 2020.

What are guaranteed annuity rates?

As the name suggests, a guaranteed annuity rate means that your retirement income is guaranteed to be at a certain percentage of the accumulated fund. These rates were usually offered on older personal pensions sold in the 1980s and 1990s.

Does pre 88 GMP increase?

Can I take trivial commutation?

It is possible to take a trivial commutation or small pot lump sum from age 55 onwards (unless you meet certain ill-health conditions, or have a protected pension age due to your occupation – in which case, you may be able to get the money earlier).

When did post 88 GMP start and end?

In pensions’ terminology, scheme service from 6 April 1978 to 5 April 1988 is known as Pre-88 GMP, and service from 6 April 1988 until 5 April 1997 is known as Post-88 GMP.

How to calculate GMP earned from 6 April 1988?

Calculate GMP earned from 6 April 1988 by dividing the total post 1988 revalued earnings factors by: the total number of years in working life (from 6 April 1978 or 6 April following 16th birthday if later) The resulting amounts should be rounded separately, and then added together to give the total weekly GMP.

When does GMP have to be inflation proofed?

There is no requirement for pension schemes to inflation-proof any GMP accrued between 6 April 1978 and 5 April 1988, however any GMP accrued between 6 April 1988 and 5 April 1997 must be inflation-proofed by the scheme by the lower of:

When did the UK government stop indexing the GMP?

The UK government continued to meet its obligations to index the GMP elements by introducing an interim solution from 6 April 2016 to 5 April 2018, which was then extended to 5 April 2021.